Suntory to Merge Alcohol and Non-Alcohol Businesses in Australasia

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Japanese beverage giant Suntory is set to merge its two drinks businesses in Australasia, creating a formidable $3 billion-a-year company that will unite renowned alcohol brands with popular non-alcoholic products.

The merger will bring together iconic alcohol brands like Jim Beam and the thriving ready-to-drink spirits brand -196, alongside non-alcoholic products such as Australia’s top-selling energy drink, V Energy.

The new entity, named Suntory Oceania, is expected to be operational by mid-2025. This strategic move prompts the conclusion of a 16-year contract between Coca-Cola Europacific Partners and Suntory Beam alcohol brands. The decision results from Suntory’s aim to consolidate its presence and fully control both businesses to accelerate growth.

Frucor Suntory’s CEO, Darren Fullerton, praised strong sales growth and high single-digit expansion in the non-alcohol and alcohol sectors. Suntory’s substantial investments, including a $400 million facility in Queensland and an Auckland production site, underline their dedication to future growth.

“Both of these businesses are in significant growth,” Mr Fullerton said.

The merger not only consolidates Suntory’s position in the market but also triggers a shift in leadership. Coca-Cola entities, which have successfully managed the alcohol brands, are making way for Suntory’s direct control. Mark Hill, managing director of Beam Suntory, appreciated the partnership with Coca-Cola while noting Suntory’s intention to take charge and drive further expansion.

Although the premium alcohol segment thrives, cost of living pressures have led to a softening mid-market. Regardless, the combined annual sales value, including alcohol and non-alcohol brands, approaches $3 billion across liquor chains, supermarkets, convenience stores, hotels, and bars.

“We’re only starting to see that in the past couple of months,” he said. “In some areas, there is a bit of an hourglass effect.” Mr Hill said.

Suntory’s merger decision underscores its commitment to seizing growth opportunities, fortifying its market presence, and aligning its diverse product portfolio for a dynamic Australasian market.

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